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F I S C A L I M P A C T R E P O R T

SPONSOR Stewart

ORIGINAL DATE

LAST UPDATED

01/18/07

02/04/07 HB HJM 1/a HCPAC

SHORT TITLE Study Homeowners’ Associations

SB

ANALYST Hanika Ortiz

ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT (dollars in thousands)

FY07

FY08

FY09 3 Year

Total Cost

Recurring

or Non-Rec

Fund

Affected

Total

$.1

see narrative

General

Fund

SOURCES OF INFORMATION

LFC Files

SUMMARY

Synopsis of HCPAC Amendment

The House Consumer and Public Affairs Committee Amendment clarifies the bills intent to

study homeowners’ associations as distinguished from other community associations; identified

by their ability to assess dues, impose regulations on things such as a home’s appearance and to

levy fines on homeowners who violate those regulations.

Synopsis of Original Bill

House Joint Memorial 1 requests the New Mexico Legislative Council to direct the appropriate

interim committee to study homeowners’ associations in New Mexico.

Specifically the memorial notes that:

•

the primary purpose of a homeowners’ association is to manage a neighborhood’s

common areas, such as roads, parks and pools; and

•

some homeowners’ associations have assumed much broader powers; and

•

as homeowners’ associations become more prevalent in New Mexico, New Mexicans are

entitled to fair covenants, conditions and restrictions when they purchase property

governed by a homeowners’ association.

The proposed study would include reviewing of state statutes relating to homeowners’

associations; reviewing homeowner complaints, lawsuits or other controversies relating to

House Joint Memorial 1/a HCPAC – Page

2

homeowners’ associations in New Mexico; and researching responses to similar homeowners’

association problems in other states.

House Joint Memorial 1 requests that copies of this memorial be transmitted to the co-chairs of

the New Mexico Legislative Council.

FISCAL IMPLICATIONS

To fulfill the requirements of this memorial, there may be costs associated with the New Mexico

Legislative Council and any appropriate interim committee designated, in the dedication of staff

time and other resources currently directed at or planned for other activities.

SIGNIFICANT ISSUES

Changes to state laws creating limited consumer protection for homeowners have been occurring

nationally over the past decade because the number of homeowner complaints has increased

along with the number of homeowners participating in these associations. These consumer

complaints may help illuminate for legislators some of the defects of existing state laws

governing these associations and provide more consumer protection for New Mexican citizens.

PERFORMANCE IMPLICATIONS

Significant time, effort and resources dedicated to this task may diminish the Legislative Council

and any designated interim committee’s ability to accomplish other tasks as required.

TECHNICAL ISSUES

Either through clarification provided within this memorial or through communications with the

sponsor or interim committee, the Legislative Council may need to clarify if the proposed study

will include condo associations, apartment or other active adult community associations.

AHO/csd:nt